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Digital Utility Market: Information by Network (Generation, Transmission and, Distribution, Retail), Technology (Hardware, Integrated Solutions), and Region — Forecast till 2030

Published At : 29 Jul, 2022
Updated At : 30 Jul, 2022
Market Snapshot
Base Year:
2021
Study Period:
2020-2030
CAGR:
11.45 %
Fastest Growing Market:
Asia Pacific
Largest Market:
North America

The global digital utility market size was valued at USD 161.41 billion in 2021 and is projected to reach USD 428.20 billion by 2030 at a CAGR of 11.45% from 2022 to 2030. The utility industry is presented with a transformative opportunity by the rapid development of digital technologies. In the coming years, decentralized production and real-time analytics derived from big data, sensor networks, and mobile computing will alter the structure and competitive landscape of utilities. Power generation and distribution, electrical grids, connected homes and businesses, customer relations, operations, and workforce processes will all be in flux as utilities navigate a landscape in flux.

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Market Dynamics

Drivers for The Global Digital Utility Market

  • Rising Investment in Renewable Energy Is Driving The Market

The growing emphasis on renewable energy projects and energy storage devices, thermally activated technologies, and transmission & distribution systems has allowed for an increase in renewable energy project investments. The United Nations Environment Programme published a report indicating that the global investment in renewable energy projects in 2018 grew to USD 272.9 billion, marking the fifth consecutive year in which the investment exceeded USD 250 billion.

Moreover, the expansion of the digital utility market is fueled by factors such as stringent regulatory standards and a rise in distributed and renewable power generation projects. Due to the benefits provided by technologies such as digital asset management, digital utility maturity assessment, and digital utility enterprise architecture, the demand for digital utility solutions is increasing rapidly.

  • Digitalization Is Promoted by Increasing Demand For Energy In Various Sectors

Industrialization and urbanization have contributed to an increase in energy demand. Global production of renewable energy is now required to satisfy rising energy demand and the depletion of fossil fuels. In 2018, investments in renewable capacities were three times greater than investments in coal and gas-fired capacities. According to the U.S. Energy Information Administration, renewable energy will account for nearly half of global electricity production by 2050. (EIA). Global electricity demand has increased as a result of a growing population, a rise in disposable income, and a rise in urbanization rates. According to the United Nations report, approximately 68 percent of the global population will reside in urban areas by 2050. Consequently, the market will be supported during the forecast period by the increasing potential for renewable energy across numerous sectors.

Restraints For The Global Digital Utility Market

  • High Operating Cost Acts As A Major Setback

It is envisioned that the requirement for a massive influx of funds will pose a challenge to the industry's major players. IEE (Institute of Energy Economics) and Financial Analysis estimate that India will need to invest between USD 60 and USD 80 billion over the next five years to improve its grid infrastructure. Globally, electric utilities are expected to invest USD 3.2 trillion in replacement and new transmission and distribution infrastructure. Digital transformation or upgrading of existing infrastructure will necessitate substantial capital expenditures, which inhibits market growth. However, the transformation of existing infrastructures and the improvements and efficiencies of electricity delivery systems are supporting the expansion of the market for digital power utilities.

Opportunities For The Global Digital Utility Market

  • Digital Power Plants And Digital Buildings Are Expected To Bring In New Opportunities

Digitalization in plants has increased as a result of the expansion of digital technology and the emergence of software distribution models, such as satware service: this software makes digital solutions more affordable for developers. In addition, the utilization of digital solutions in power plants can reduce carbon dioxide emissions by enabling fuel analysis and improved combustion performance. It enhances the flexibility to increase the proportion of renewable energy sources and mitigate the impact of cycling. Additionally, digitalization enables the developer to adapt to regulatory and market changes.

Digitalization and technological advancement in buildings will facilitate energy efficiency and improved power management. The digitalization of buildings, such as sensors, must be able to detect energy and power demand, temperature, air quality, the presence of moisture, and its effect. To achieve energy-efficient, automated buildings, digital technologies and solutions will be necessary. In both new construction and existing buildings, a growing number of standards and guidelines pertaining to future-oriented, integrated investment plans for building-related digitalization technologies will emerge.

 

Segmentation For The Global Digital Utility Market

the global digital utility market is segmented on the basis of network, technology, competitors, and regions.

The market is divided into generation, transmission and distribution, and retail by the network. The transmission and distribution subsegment dominated the network segment because it accounted for the largest portion of spending on aging infrastructure. New digital devices and communications and control systems improve the efficiency of assets and operators' ability to monitor and manage electric transmission and distribution networks.

The digital utility market is divided into integrated solutions and hardware based on technological factors. In terms of technology, the largest market segment is hardware. The hardware of a digital substation consists of smart meters, smart thermostats, programmable logic controllers, and smart transformers, among other devices. As a result of the high price of hardware, this market segment holds a larger share.

 

Regional Analysis of The Global Digital Utility Market

Digital Utility Market Regional Analysis

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The digital utility market has been analyzed with respect to six regions: North America, Europe, Asia-Pacific, South America, the Middle East, and Africa. Due to the modernization of aging infrastructure and the rise in electricity demand in the region, North America is anticipated to lead the global market over the forecast period.

As a result of government support, numerous incentives, and national goals, the Asia-Pacific region is the regional epicenter of the power market. In the year 2020, the global consumption of primary energy reached 556.63 exa joules. Due to the inadequacy of transmission and distribution (T&D) networks in numerous Asia-Pacific nations, electricity is unavailable in some remote and rural regions. The countries in the region are investing heavily in the construction of a transmission line network to bring electricity to these areas. China was the largest market for investment in the power sector in 2020, according to the International Energy Agency (IEA), due to the country's growing industrial and commercial demand for electricity. In addition, China's transmission and distribution grid has undergone significant upgrades and modifications to enable it to transmit more electricity and meet future demand.

Over the past four years, India's energy investments have increased by more than 10 percent, the highest rate of any country. Solar photovoltaic (PV) and wind energy projects will support the continued outspending of fossil fuel-based power generation in 2020. This is anticipated to drive the digital power utility market throughout the forecast period. In India, nuclear power plants with a capacity of 7,000 MW were in various stages of construction as of the year 2020.

Under its flagship Production Linked Incentive (PLI) program, the Indian government announced in February 2022 that it would allocate INR 19,500 billion to boost the manufacturing of solar modules. This is anticipated to stimulate the digital power utility market. Based on these factors, the Asia Pacific is expected to be the fastest-growing market by 2030.

 

Competitive Landscape

  • Accenture plc (Ireland)
  • Cap Gemini S.A. (France)
  • General Electric Company (U.S.)
  • Siemens AG (Germany)
  • SAP SE (Germany)
  • International Business Machines Corporation (U.S.)

 

Recent Developments

  • Wipro Limited, an Indian multinational corporation, signed a multi-year global strategic IT and digital agreement with the National Grid, a British multinational electricity and gas utility provider, in October 2021 in order to accelerate its digital innovation journey.
  • In March of 2021, ABB's cumulative solar plant automation solutions in India based on Programmable Logic Controllers (PLC) reached 5 gigawatts (GW).
  • Infosys Ltd. and Microsoft Corporation signed a multi-year strategic agreement with Ausgrid in September 2021 to expedite the cloud transformation of the largest electricity distributor on the east coast of Australia.
  • SP Group collaborated with the Energy Market Authority (EMA) and the Science and Technology Policy and Plans Office in October 2021 to develop the first digital twin for the national grid. Through real-time monitoring of events, the digital twin is anticipated to improve the grid's resilience and dependability in Singapore.

 

Global Digital Utility Market: Segmentation

By Network

  • Generation
  • Transmission and Distribution
  • Retail

By Technology

  • Hardware
  • Integrated Solutions (Cloud and Software, Services)

By Region

  • North America
  • Europe
  • Asia-Pacific
  • Middle East
  • South America
  • Africa
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